On February 18, 2004 there took place a general meeting of members of “KAZAKHSTAN-KAMAZ” Automotive Consortium at “Intercontinental” hotel in Astana, the capital city of the Republic of Kazakhstan.

KAZAKHSTAN-KAMAZ Automotive Consortium was established on July 1, 2003 by Russian KAMAZ Inc. and some companies from Kazakhstan: “Astana-Finance Inc.”, “Isker Inc.”, “Ispat-Karmet Inc.”, “KazakhstanTractor Inc.”, “ Semipalatinsk Machine Building Plant Inc.”, “KAMAZ Service Center in Akmola” Ltd., “Engine Overhauling Plant in Kustanai” Ltd. The prime target set by the consortium is development of automotive industry in Kazakhstan.

The object of today’s meeting is to summarize the first results of the consortium’s activities and to approve priority programs for 2004.

Sales volumes of KAMAZ Inc.’s products in Kazakhstan have doubled as compared with 2002. KAMAZ Inc. has got 59% of Kazakhstan market share. Spare parts sales have increased by 1,7%. Development of assembly production has been quite significant. ISKER Inc. has assembled 200 KAMAZ trucks, and put into production 7 models of mass produced vehicles, and also assembled the first batch of garbage-removal trucks and truck-mixers.

There has been worked out the program of development of vehicle servicing, which is currently being carried out.

The leasing program, offered by ASTANA-FINANCE Inc., is also developing rather efficiently. Within a six-month period there have been leased over 100 units of various vehicles and there are quite many orders in the company’s order portfolio for 2004.

ASTANA-FINANCE Inc. is quite effectively materializing other consortium projects too, such as establishing a service net and providing for maintenance and overhaul.

There has been initially surveyed the market of wheel tractors for estimating requirements and demands of Kazakhstan in this kind of vehicles.

The members of the meeting have approved a plan of priority activities for 2004. Considering that the main target of the company is to meet customers’ demands, the main priority will be given to development of a service net all over Kazakhstan that should be completed by the end of 2004. This network will ensure servicing of 100% of KAMAZ vehicles operating in the republic. There will be arranged and certified service centres in each region of Kazakhstan, and also established their affiliates and technical service stations (TCS) along the main roads and nearby towns and villages. To ensure fast and quality maintenance, the distances between the TSCs shouldn’t exceed 100 km, while spare parts should be delivered to them within 24 hours.

2004 should become a crucial year in developing assembly production. ISKER Inc. has set a target to assemble 400 trucks min. There will be further developed a leasing program to provide customers in Kazakhstan with KAMAZ and ISKER vehicles.

It is planned to put more efforts into implementation of a superstructure production project at the plants of Kazakhstan. To meet this target the consortium is going to closely cooperate with “Kazakhstan Engineering” national company, which is a new organisation.

Russia and Kazakhstan plan to initiate joint activities on establishing of a wheel tractor production. Sergey Kogoghin, Director General of KAMAZ Inc., has confirmed that his Company was ready to provide Kazakhstan with two test samples of such tractors.

The consortium has approved its operation plan for 2004, which provides for drafting a concept on development of automobile and farming machine industry in the Republic of Kazakhstan till 2010.